Now, he's an antibailout crusader, using planned meetings with several organizations, including the Congressional Black Caucus, to denounce the $700 billion plan rather than talk up alternative energy. The biggest flaw, according to Mr. Kovacevich, an economist by training, is that after the government buys up bad securities, there's a possibility they will lose more value and be bought back, at a discount, by the same firms that caused the problem in the first place.

"There can't be a flip here," he said. "This just benefits Goldman Sachs: They take the money from your sack and put it into their sack."

Kovacevich joins the swelling ranks of a grass-roots movement aimed at convincing Congress to turn down the Bush administration's plan. The movement crosses party lines. It draws support not only from angry taxpayers but also some economists. And it is beginning to make itself heard in the halls of Congress.

"If it looks like they bail out Wall Street, there's going to be a lot of anger," said a Democratic party staffer in Michigan, who declined to be identified. Michigan is a key swing state in the presidential election.

AngryRenter.com, backed by a conservative lobbying group run by former House majority leader Dick Armey, claims to have 58,300 signatures for a petition opposing the administration's plan. In less than 24 hours after posting his letter to Secretary Paulson outlining an alternative to the bailout, Sen. Bernard Sanders (I) of Vermont said he gathered more than 8,000 citizen cosigners.

Among the "netroots" – blogs that cater to Democrats – the sentiment is also overwhelmingly against a simple bailout.

"We're opposed to rushing into this too quickly," said Markos Moulitsas, who runs the Daily Kos site. "We haven't gotten a proper explanation of the problem or how $700 billion is supposed to fix it. We're supposed to take it all on faith, and we've been burned way too many times by this administration to take anything they say on faith."

While many who oppose the bailout don't have ready alternatives, some observers do have specific proposals.

The object of the bailout plan is as much to reassure the markets as it is to actually buy the bad debt securities, said Milton Ezrati, senior economist at Lord, Abbett & Co., in Jersey City, N.J. To that end, another method might have been to do what the Federal Reserve Bank of New York did when Long-Term Capital Management collapsed in 1998. The Federal Reserve told banks that they should lend to LTCM and that they would, in return, have backing from the Fed, Mr. Ezrati said.

In this case, the Fed and the Treasury could have told banks to provide credit months ago with implicit backing from the government, he added. It would not have been as dramatic, but it might have forestalled some of the problems that exist now.

Not everyone in the industry agrees. "There are 100 options," said David Kotok, chief investment officer at Cumberland Advisors, a money-management firm in Vineland, N.J. "But we don't have the time to spend a year weighing them."

While Paulson's original request for little or no oversight was too much, the focus shouldn't be on punishing those responsible because the fundamental credit mechanism of the market is broken, he said. The markets need three things: a lot of money, transparency in the way decisions about that money are made, and a clear process for bailing out institutions.

"Main Street only sees rich people on Wall Street getting help," he said. "They don't understand that the local store gets credit from Wall Street firms." That makes transparency in any bailout plan that much more crucial, he added.

The bailout seemed to have mixed public support. Nearly two-thirds called it the right thing to do in a Pew Research Center survey of 1,003 adults released Tuesday. But a Rasmussen Reports telephone survey of 1,000 likely voters Sunday found only 28 percent support. Both surveys found opposition around 30 to 35 percent.

But since then, Congress has gotten an earful from constituents. Carolyn Cheeks Kilpatrick (D) of Michigan, who chairs the Congressional Black Caucus, said she has been getting calls that are overwhelmingly in favor of holding off on any bailout plan. "It's not settled," she said. "We know it's urgent. But we want it tied to a stimulus package."

Share this article

Link copied.

Next up

Here are more stories that look at the news with empathy, insight, and hope.